USD/JPY Fundamental Analysis November 28, 2012, Forecast

Analysis and Recommendation:

The USD/JPY declined to 82.01 off by 7pips, although the outlook for the JPY remains weak, as the government and the Bank of Japan remains uncertain. Yesterday the Governor of the central bank publicly defended the banks position and laid out all the steps that the bank had taken recently to stimulate the economy. Poor economic results and what is viewed as inaction by the bank forced Prime Minister Noda to set new elections for December 16th. Shinto Abe, the likely winner, has a much different view of the goals of the bank and how to help the economy recover. Abe would push the bank to inject huge amounts of easing, which has traders worried as additional stimulus would reduce the value of the currency.

Shirakawa said the BOJ’s monetary easing scheme, including financial asset purchases, coupled with government yen-selling intervention, “has fended off the yen’s appreciation to some extent.”  “It is really important for the government — through measures such as decisive deregulation — to raise the attractiveness of domestic investment and lay the foundations that encourage firms to be adventurous.

“It is also important for the government to continue making efforts to ensure fiscal consolidation,” Shirakawa said.

The additional monetary easing steps being called for by Abe include forcing the central bank to buy government construction bonds from the market to finance a return to public works, and the setting of a higher inflation goal.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data November 27, 2012 actual v. forecast

 

Upcoming Economic Events that affect the AUD, NZD, JPY and USD

Government Bond Auction

Date Time Country 

Nov 28 10:10 Italy  

Nov 28 10:10 Sweden 

Nov 28 10:30 Germany 

Nov 28 18:00 US 

Nov 29 10:10 Italy